(Reuters) — Florida Governor Ron DeSantis signed a bill on Tuesday that bars state officials from investing public money to advance environmental, social and governance goals, and bans the sale of ESG bonds.
The bill is one of the most far-reaching efforts yet by US Republicans against sustainable investment efforts, and a clear policy message from DeSantis, a likely presidential contender.
Republicans, including some from energy-producing states, say many executives and investors have lost focus on returns as they increasingly consider issues such as climate change and workforce diversity.
“We want them to act as fiduciaries. We don’t want them to engage in these ideological joy rides,”
; DeSantis said just before signing the bill at a webcast event.Lawyers and credit analysts said the new law could deny municipalities access to large pools of ESG-mandated capital. An additional question is how officials interpret the terms, said Thomas Torgerson, co-head of global sovereign credit ratings at DBRS Morningstar, which rates debt.
“If we as a credit rating agency cannot assess environmental, social or governance risks, it creates a problem for us. There are climate and weather risks that are very relevant, especially in a state like Florida, that would be captured in our assessment of credit risk,” he said.
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